Best Franchises to Buy and Open in 2024

With any sort of business investment, the notion of “best” is personal.

The choosing of a franchise to own should be based on several factors that only you can really answer such as your personal interests, family obligations, how much needs to be invested, location, etc.

So maybe the question isn’t “What's the best franchise to buy?” Maybe the question really is “What’s the best franchise to buy for me?” How do you answer that question, though? How do you determine which of the thousands of franchises available is the best franchise for you? It’s a process, and that process involves evaluating your personal situation against certain facets of franchising.

When it comes to determining the “best franchise” for you that means doing your research and vetting the franchises that interest you against how they will potentially fit into your life. Entrepreneur suggests taking into account five areas that it refers to as pillars: 1) start-up costs and fees; 2) size and growth; 3) brand strength; 4) support; and 5) financial strength and stability.

Let’s use those as a guide as we examine what you should look for in each area to find the best franchise for you.

Start-Up Costs and Fees

The first question on the path to finding the best franchise for you to buy is: Can I afford it?

One of the best places, if not the best place to start your research into how much a franchise will cost you to open is the franchise disclosure document (FDD) of the brand you are interested in.

The FDD, which all franchises are required to give to a potential franchisee no less than two weeks before any contracts are signed, covers different facets of the franchise operation from costs to obligations and more. Items 5 through 7, specifically, cover the initial investment and ongoing costs of a franchise.

The Wall Street Journal suggests franchise owners being prepared to pay at least 20% of the initial investment from your own money. And remember, not all franchise businesses turn a profit right away. You may need to rely on savings or your current job to cover costs until your franchise begins to turn a profit.

Size and Growth

Remember: Bigger isn’t always better.

Just because the franchise has a lot of locations doesn’t mean it’s going to be popular where you are. Fit is key. Is the area you live in ready to support the franchise you’re interested in?

The best franchise for you is going to be one that you not only have an interest in, but has demand where you live too. It’s not going to do you any good to open a cleaning franchise where the market is truly in need of an auto repair shop.

So how do you find what your area needs? Franchise consultants commonly suggest meeting with an area business consultant, talking to a business or marketing professor at a local college or university, or contacting your local Small Business Administration (SBA) district office for some guidance.

Franchisors are also top-level research sources. They invest resources into knowing which territories can support their brands. If a franchisor is entertaining inquiries for new franchisees in your area, it’s a good indication that its data is showing a positive match.

Brand Strength

Does the franchise know who they are?

“When a franchise prospect interacts with a potential franchise, the brand needs to be well developed with a clear purpose,” says Katherine LeBlanc, CMO for Painting with a Twist. “Part of the benefit of purchasing a franchise is the brand equity that has already been developed, the research on who the core prospect is, and the branding from top to bottom that every new business needs.”

Beyond researching the brand and marketing aspect of a franchise via secondhand information, you can discover more about how solid a franchise is by speaking with current (and in some cases former) franchisees of a brand. This task is made somewhat easier by the presence of a list containing the contact information for all of a franchise system’s franchisees in the United States in the Exhibits section of the FDD.

Franchisor Support

You have to put in the work to be successful, but part of the draw of being a franchisee is that there is an entity there to help guide you. Within Item 11 of the FDD, there is an overview of the support a franchise gives to its franchisees, including training. Review this section carefully and don’t be afraid to ask the franchisor if you have any questions.

Also, in addition to finding out about the franchise brand’s strength as noted above, it’s wise to use the list of franchisees in the Exhibits section to talk with people who are already living the life you want to live as the franchisee of a certain brand.

While they may not tell you everything, doing your due diligence by talking to current franchisees will give a much better idea of what to expect from the franchisor. Conducting these conversations will help you anticipate realistically what to expect during your time as a franchisee.

Financial Strength and Stability of the Franchise

“Opening a franchise is usually a commitment of 10 years or more, so look at the franchisor's history and note how long the franchise has been in business, how well the franchise system has fared through economic changes and how well its business model changes to meet the needs of an evolving consumer dynamic,” says Joe Schumacher, CEO of Goddard Systems, Inc.

Something else to keep in mind when you believe you’ve found the best franchise for you and are in the midst of negotiations to become a franchisee: Is the franchisor a little too willing to make concessions to get you to sign the franchise agreement? Yes, certain terms of the agreement can be negotiated to a degree, but a franchisor that is willing to significantly change the terms of agreement from franchisee to franchisee may not have a sustainable model in place yet.

For instance, it’s a red flag if a franchisor is overly aggressive about discounting initial fees and/or royalties (beyond the common discounts for military veterans or those in certain markets or demographic groups desirable to the franchisor for expansion). Although it would be a positive to you initially, franchising is a business system that requires a certain level of monetary capital as fuel.

If the franchisor is acting desperate for capital, what does that say about the foundation it has laid for its franchisees? Furthermore, royalty fees play a very important part in the future development of the franchise system. If the franchise isn’t gaining enough money in royalties, it risks not being able to adequately keep up with sustaining the franchise through the years.